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More Americans are being forced to ditch some streaming services to save money, narrowing the path to escape from daily stress, according to a new study.
In a survey conducted by consulting firm Deloitte, about 40% of Americans said they had cut back on their entertainment subscriptions in the past three months due to financial concerns. According to the survey, nearly half of all consumers say they pay too much for streaming video services, and nearly 75% express dissatisfaction with the continued rise in entertainment subscription prices.
“Higher food and gas prices and other inflationary factors are taking a toll on Americans’ discretionary spending,” said Stephen Connors, founder and president of Connors Wealth Management. “They are forced to cut out what they love most: entertainment.”
While Americans may feel a sense of emptiness as they watch less, financial advisors welcome the move.
“The fact that someone is actually auditing their subscriptions and making cuts…that means financially conscious people are taking action, and I would call that a positive trend,” said Christopher Walsh, regional marketing director and financial advisor at Capital Choice Financial Group.
“Reducing streaming is generally a good move for several reasons,” Walsh said. “Stop wasting money on things that don’t bring you real value, freeing up money that could be put toward debt, life insurance, or retirement that your future self will appreciate.”
How much do Americans spend on streaming?
According to Pew Research last year, Americans love streaming services, with 83% saying they watch videos on them. Only 10% said they had never used a streaming service.
For this luxury, the average subscriber household spends $69 a month on a video streaming service subscription, according to Deloitte. Millennials spend more than any other generation, averaging $76 per month.
prices are rising
Netflix has increased the monthly price for ad-supported slots by $1 to $8.99 per month, according to plans and pricing listed in the streamer’s online help center. Ad-free plans have increased in price by $2 per month.
Monthly fees for new subscribers started on March 26th. Netflix said in a statement that current members will be notified via email one month before the new rates take effect. (The exact timing will vary depending on the particular member’s billing cycle.)
Is now a good time to raise prices?
According to Deloitte, 61% of consumers said they would be more likely to cancel their favorite SVOD service if the monthly subscription price increased by $5.
Deloitte did not look into small price increases like Netflix’s $1 or $2 per month increases.
What would Americans do instead?
As for new entertainment, Connors said there are still free options on the Internet, such as free YouTube videos, for people who want to keep watching something from the couch.
But as summer approaches, “people are probably going to be outside more,” he says. “Exercise, reading, and other low-cost or free alternatives can be good alternatives.”
And for the savings from ditching a subscription entertainment service?
“What matters is where the money goes next,” Walsh said. “In my practice, that conversation usually ends with someone paying off their credit cards, finally getting the life insurance their family needs, or putting money toward retirement, which is a great outcome for canceling Netflix.”
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at mjlee@usatoday.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
